U.S. natural-gas supplies expanded by less than half the normal rate last week as a heat wave boosted demand from power plants to run air conditioners, according to analyst forecasts compiled by Bloomberg.
Inventories rose 26 billion cubic feet, or 0.8 percent, to 3.189 trillion cubic feet in the week ended July 20, based on the median of 19 estimates. The five-year average stockpile increase for the week is 61 billion, according to the Energy Department. Supplies climbed 48 billion a year earlier.
Hotter-than-normal weather this month spurred demand for the fuel at power plants that had already started burning more gas as prices dropped to a decade low in April. A below-average supply gain last week will reduce the gas surplus for the 16th straight period. Gas closed above $3 per million British thermal units last week for the first time in six months.
“We’ve had a record level of heat this summer, as July is tracking the forecasted level of about 24 percent hotter than normal, while August is forecasted to be 6 percent hotter than normal,” said Shiyang Wang, an analyst at Barclays Capital in New York. “A lot of the natural gas power demand is boosted by this weather anomaly.”
Natural gas for futures gained 20.7 cents, or 7.2 percent, to $3.081 per million British thermal units last week on the New York Mercantile Exchange. The August contract fell 10.4 cents, or 3.3 percent, to $3.093 per million Btu as of 12:19 p.m.
The high temperature in Chicago reached 99 degrees Fahrenheit (37 Celsius) on July 17, 14 above normal, and the next day New York climbed to 100 degrees, 16 more than usual, according to AccuWeather Inc. in State College, Pennsylvania. Dallas rose to 105 degrees on July 20, 8 above normal.
Cooling demand was 66 percent above the norm in the north- central states and 11 percent above usual nationwide, according to Weather Derivatives. U.S. air-conditioning needs will be 12 percent above normal in seven days ending Aug. 1, data from the Belton, Missouri-based forecaster show.
Gas stockpiles in the week ended July 13 were 18 percent above the five-year average for the period, department data show. The supply surplus had widened to a six-year high of 61 percent at the end of March after the warmest winter on U.S. record since 2000 reduced demand while production gained.
The latest stockpile estimates ranged from increases of 20 billion to 35 billion cubic feet. The Energy Department’s weekly supply report is scheduled for release at 10:30 a.m. tomorrow in Washington.
To contact the reporter on this story: Naureen S. Malik in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Bill Banker at email@example.com